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Does Financial Constraints Impede Growth Convergence? Evidence From ECOWAS

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  • Onyimadu, Chukwuemeka

Abstract

The paper examines the hypothesis that financial constraints can impede convergence in growth rates. Using a Schumperetian growth model that incorporates innovations and financial constraints, the paper was able to put forward plausible effects of financial constraints on growth convergence in ECOWAS member countries. Employing a panel regression, the paper found that financial constraints which are present in countries with a less developed financial sector can impede growth convergence. This finding is robust when policy control variables – government size, inflation, trade openness - were included in the model.

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  • Onyimadu, Chukwuemeka, 2015. "Does Financial Constraints Impede Growth Convergence? Evidence From ECOWAS," MPRA Paper 77205, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:77205
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    More about this item

    Keywords

    Growth; Conditional Convergence; Financial Development; Innovations;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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